AMD, Intel Looking to Gain Mobile Foothold

 

Both Intel and AMD are looking for ways to gain a greater foothold in the mobile computing space, particularly in tablets and-in Intel's case-smartphones. Intel is expecting smartphones and tablets powered by its Atom "Medfield" chip to hit the market in the first half of 2012, and also is pushing the concept of ultrabooks-very thin and light notebooks with tablet features-as a way to compete not only with tablets but also Apple's MacBook Pro. Intel on Dec. 14 unveiled a reorganization that combined four divisions into a single business unit focusing on mobile and communications technologies.

AMD officials reportedly also have broached the idea of ultrabook-like systems running on their upcoming Brazos 2.0 platform, which would include an updated "Zacate" CPU and Radeon HD 7000 series graphics chip. According to reports, AMD also would take a different tack than Intel, which had outlined detailed specifications for the ultrabooks. AMD instead would leave such details up to the systems makers.

AMD also reportedly will address a number of subjects, including tablets, at its annual Analysts Meeting in February.

Read has had a busy few months since being selected as CEO after a prolonged search that began in January, when Dirk Meyer resigned amid reported clashes with the board of directors over the company's direction. Read had to deal with supply problems at manufacturing partner Globalfoundries that forced AMD to lower its third-quarter forecast, and in November the company announced it was laying off 10 percent of its workers in hopes of saving $200 million this year.

However, Read and AMD were successful in correcting some of the manufacturing issues, according to Raymond James analysts Mosesmann and Peterson, and the restructuring in November included a focused push into particular areas: low-power computing, the cloud and emerging markets.

The analysts gave Read strong marks in his first few months and agreed with his assessment that AMD is in a solid competitive situation, with a distracted Intel above and a still-learning ARM and partners. Mosesmann and Peterson expect more organizational changes at AMD and for its current share of the server chip market to grow into double digits-from the current 5 percent-over the next five quarters, thanks to server design wins from OEMs based on its Opteron chips that are built on the "Bulldozer" architecture.

"Our early read on Mr. Read as AMD's new CEO: we are impressed," they wrote. "The coming quarters will be key for Mr. Read to garner credibility and he is off to quite a good start, in our view." 

Other analysts are taking a wait-and-see approach. UBS analyst Uche Orji said he is interested in what AMD will present at the meeting in February in terms of low-power chips for ultrabooks, tablets and servers.

"Key for AMD to regain mindshare is for it to move the debate away from the perception it will get squeezed in the Intel vs. ARM battle to one of offering unique value vs. Intel and competitive power efficiency and cost [plus] x86 compatibility vs. ARM," Orji wrote in a Dec. 13 note.